Now, being a bit of a game fan especially for Sega games, I know of this game.
It is for the Sega Saturn (which was released about the same time as the PS1) and this game was released towards the end of the saturn's life. It is a good game and probably pretty rare, but considering how rarer games can be found for much less, it struck me as exceptionally pricey, no matter how good the condition!

Ooh, does that mean if I decide to flog off my old Mega Drive games, I can also charge over-inflated amounts for them?

That seller is seriously delusional over the value of his game. If he thinks anyone in their right mind would fork out that much money for a game (honestly, that's all it is at the end of the day) he must definitely be off with the pixies.